No Tariff Suspension for Auto Glass Industry

Auto glass businesses won’t see any tariff-related cost relief as the White House suspends some tariffs while raising others on imports from China.

The administration issued an executive order on April 9 raising tariffs on Chinese imports, including glass, while suspending other country-specific tariffs until July 9. As of April 10, a 125% tariff was imposed on goods from China. This increase is in direct response to China’s retaliatory 84% tariff levied on April 9, according to the White House.

The administration paused the 10% tariff on imports from every country except China after many nations agreed to address their trade relationships with the U.S.

As of the executive order issued April 9, automotive-specific tariffs on foreign imports remain unchanged.

Automobiles and automotive parts aren’t included in the suspension, so the 25% tariff implemented on March 26 remains.

The auto industry’s total cost will increase by $107.7 billion due to the tariffs according to analysis by the Center for Automotive Research (CAR). The raised cost of imported parts, including original equipment manufacturer (OEM) glass, contributes $43 billion.

A March 26 automotive tariff order specified that automobile importers from Mexico and Canada can “submit documentation to the [Secretary of Commerce] identifying the amount of U.S. content in each model imported into the United States.” If approved, a tariff will be charged on only the value of the non-American-made parts in the vehicle.

That’s not as easy as it may sound, CAR’s analysis says. All automakers, even the U.S.-based ones, import foreign parts.

“A U.S. domestic vehicle, comprised of 100% domestically-produced content, does NOT currently exist,” the analysis says. “United States-produced vehicles have foreign parts content ranging from 20% to 91%, according to American Automobile Labeling Act (AALA) data.”

It’s also hard to calculate which vehicles are domestic or foreign, CAR says, because most automakers have facilities and manufacturing plants spread across the globe. Plus, “even vehicles produced by the same automaker have different degrees of domestic (and imported) content.”